Mai Kim Lien, Deputy Director of the Department of Climate Change under the Ministry of Natural Resources and Environment, speaks at the workshop. (Photo: baotainguyenmoitruong.vn)
In the opening speech, Mai Kim Lien, Deputy Director of the Department ofClimate Change under the Ministry of Natural Resources and Environment, saidthat climate change had become the biggest challenge for humanity, and has beenaffecting all aspects of economics, politics, diplomacy, and global security.
In addition to proactive adaptation, each country must be responsible forreducing greenhouse gas emissions according to its nationally determinedcontributions (NDC) to implement the Paris Agreement on climate change from2021.
In order to reduce greenhouse gas emissions, in addition to applying advancedtechnology, many countries apply carbon pricing tools.
"Commonly-applied carbon pricing tools are carbon taxes, greenhouse gasemission quota trading systems, and carbon credit mechanisms," emphasised Lien.
In parallel with the roadmap to establish and operate the domestic carbonmarket, the Prime Minister has also assigned relevant ministries and branchesto research and propose regulations and roadmaps for applying carbon tax in Vietnam,said Lien.
At the workshop, experts discussed and proposed a carbon tax design and roadmapto mitigate the impact of CBAM on the country.
Attorney Nguyen Anh Minh, NHQuang and Associates Law Office, said that carbontax was a tool used in many countries around the world, which encouragesbusinesses and people to reduce greenhouse gas emissions into the atmosphere.
The taxable object is direct emissions or the carbon content of fossil fuels.The regulation applies during the production, import or consumption process.
Regarding tax rates, experts analysed that a low rate might not motivateemission reductions, while a high rate could have negative effects on economicstability in the short term.
Therefore, the principle for determination will be based on ensuring costcompensation, taking into account Vietnam's socio-economic development policy.
This aims to ensure fairness, transparency and equality in the rights andobligations of citizens.
In addition, non-taxable entities may include remote areas, vulnerable groupsor industries crucial to the economy.
On the other hand, experts also propose integrating carbon tax intoenvironmental protection tax as both apply to goods that have a negative impacton the environment.
In fact, certain products, such as coal and gasoline, are already subject toenvironmental protection taxes.
Therefore, the environmental protection tax can also be expanded to includegreenhouse gas emissions arising from the production and use of taxable goods.
Therefore, it is important to ensure that a carbon tax (if introduced as partof an existing environmental protection levy) is directly linked to thegreenhouse gas emissions of goods and other products should be included in theenvironmental protection tax to be consistent with CBAM such as cement andsteel.
Sharing experiences in implementing carbon taxes, Axel Michaelowa, SeniorFounding Partner of Perspectives Climate Group, said that carbon tax sets afixed carbon price in US dollar/tCO2e.
In Colombia, the carbon tax has been implemented since 2016 on domesticallyproduced or imported fossil fuels.
Coal alone will be fully taxed from 2028. Tax is determined based on the carboncontent of each fuel type. The tax rate is calculated at 4.4 USD/tCO2e.
The tax covers 23% of Colombia's total greenhouse gas emissions.
Colombia's carbon tax revenue is 527 million USD from January 2017 to Aprilthis year, of which 80% of the revenue from the carbon tax is used to fundenvironmental protection measures and 20% goes to the Colombia Peace Fund.
CBAM has been approved and officially takes effect on May 17 this year. CBAMwill begin a three-year transition period from October 1 this year.
After this time, the CBAM mechanism will officially take effect from January 1,2026 and be fully operational in 2034.
Currently, the EU has published a draft regulation implementing CBAM, whichincludes details of the reporting obligations and necessary information aboutCBAM items from importers.
During the transition period, importers will be obliged to report appropriateemissions from imported goods covered by the regulation./.
VNA
